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Temasek backed PE firm to make $100m foray into Chinese developer

FountainVest Partners, the private equity firm led by former Tamasek Greater China head Frank Tang and backed by the Singaporean government’s investment arm, is to invest $100m in convertible bonds and warrants issued by Henan province-focused developer Central China Real Estate.

Shares in Central China Real Estate, the Chinese residential developer focused on the Henan province in the east of the country, were suspended today after it agreed to issue $100 million in convertible bonds to a consortium led by Temasek Holdings-baked private equity firm FountainVest Partners.

The developer said in a statement to the Hong Kong stock exchange that the shares were suspended due to the issue of the convertible bonds and warrants but divulged no further detail.

Shares in Central China Real Estate have risen 237 percent this year and closed at HK$2.39 yesterday, up more than 8 percent, and reflecting a market capitalization of HK$5.2 billion ($671 million).

FountainVest closed its first private equity fund at $950 million in November 2008 after attracting investment from parties including the Canada Pension Plan, Ontario Teachers’ Pension Plan and CDC Group.

The firm was founded by former Tamasek executive Frank Tang, who was previously headed up the Singaporean government investment arm’s greater China division.